U.S. Toymaker Doubles Down in China Despite Rising Costs, Political Tensions



Gabriel Crossley, Timothy Aeppel | Reuters

Hammered by tariffs, pandemic-fueled disruptions and rising costs, some global manufacturers are reducing their reliance on Chinese factories and moving assembly lines to Vietnam, Malaysia and other lower-cost countries, or even Japan.

But Ryan Gunnigle, the chief executive of Kids2, is swimming against that tide. The Atlanta-based maker of toys and infant products recently opened the first phase of a factory on the banks of the Yangtze river in central China at a cost of $20 million.

China’s dense supply networks, still-competitive labor costs, and growing domestic market proved too powerful a draw.

“If you’re making wood furniture, Indonesia is great,” Gunnigle said. “But for us, being central in China just outweighs any benefit of other markets.”

Gunnigle, who oversees a five-decade-old brand, has watched some suppliers and competitors set up shop in other countries – only to move back to China after finding the costs in their new locations were too high or having to deal with labor shortages and difficulties finding suppliers.

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